Authored by the expert who managed and guided the team behind the Bahrain Property Pack
Yes, the analysis of Manama's property market is included in our pack
Property taxes and fees in Manama can add up to significant costs that many investors overlook.
As of September 2025, the Manama property market requires buyers to pay multiple fees including registration charges, stamp duties, and ongoing municipal taxes. Understanding these costs is crucial for anyone considering real estate investment in Bahrain's capital city.
If you want to go deeper, you can check our pack of documents related to the real estate market in Bahrain, based on reliable facts and data, not opinions or rumors.
Property buyers in Manama pay a 1.7% registration fee (if paid within 60 days, otherwise 2%) plus a 2% stamp duty on the property value. Foreigners face an annual municipal tax of 10% of the rental value, while locals are exempt from this charge.
Additional costs include maintenance fees ranging from BD 1-3 per square meter annually, utility connection fees paid to EWA, and legal fees of BD 200-500 for standard transactions.
| Fee Type | Rate/Amount | Payment Timeline |
|---|---|---|
| Property Registration Fee | 1.7% (within 60 days) / 2% (after 60 days) | One-time at purchase |
| Stamp Duty | 2% of property value (reduced to 1.7% if paid within 60 days) | One-time at purchase |
| Annual Municipal Tax (Foreigners) | 10% of annual rental value | Annual payment |
| Annual Municipal Tax (Locals) | Exempt or reduced rates | Annual payment (if applicable) |
| Maintenance/Service Charges | BD 1-3 per square meter or 1-3% of property value | Annual payment |
| Administrative Processing | BD 1-5 per form/certificate | One-time during transaction |
| Legal/Notary Fees | BD 200-500 or 1-3% of property value | One-time at purchase |
How much is the property registration fee in Manama?
The property registration fee in Manama is 1.7% of the property value if you pay within 60 days of the sale contract being issued by the notary.
If you miss this 60-day deadline, the registration fee increases to 2% of the property value. This creates a clear incentive for buyers to complete their registration promptly after the purchase agreement.
On top of the main registration fee, you'll pay small administrative charges of BD 1 for the registration form and BD 5 for standard transaction processing. These administrative fees are minimal compared to the main registration cost.
For example, on a BD 100,000 property purchased and registered within 60 days, you would pay BD 1,700 in registration fees plus BD 6 in administrative costs, totaling BD 1,706.
Are there any annual municipal taxes on residential properties, and if so, how much are they?
Annual municipal taxes in Manama depend entirely on whether you're a local or foreign property owner, with significant differences in rates.
Foreigners pay an annual municipal tax of 10% of the property's annual rental value, regardless of whether the property is actually rented out or not. This tax is calculated based on the theoretical rental income the property could generate, not your actual rental income.
Local Bahraini citizens are typically exempt from annual municipal taxes or pay significantly reduced rates depending on specific circumstances and parliamentary decisions. First-time local homebuyers may receive additional exemptions.
For a foreign-owned property with an annual rental value of BD 6,000, the municipal tax would be BD 600 per year. This represents one of the most significant ongoing costs for foreign property owners in Manama.
What percentage is the stamp duty when purchasing a property?
Stamp duty for purchasing property in Manama is 2% of the property's total value.
However, like the registration fee, you can reduce this to 1.7% if you pay within 60 days of the transaction. This discount applies to the same 60-day window as the registration fee reduction.
The stamp duty is separate from and additional to the property registration fee, meaning you pay both charges during the purchase process. Both fees combined can represent 3.4% to 4% of the property value depending on your payment timing.
On a BD 200,000 property, the stamp duty would be BD 3,400 if paid within 60 days, or BD 4,000 if paid later.
Are there any transfer fees when selling or buying property, and how are they calculated?
Transfer fees in Manama are identical to the property registration fees, following the same 1.7% to 2% structure based on payment timing.
When buying property, you pay 1.7% of the property value if completed within 60 days of the sale contract, or 2% if completed later. These transfer fees cover the legal transfer of ownership from seller to buyer.
Sellers may face additional costs including real estate agent fees ranging from 1% to 5% of the property value, plus their own legal fees for the transaction. These seller costs are separate from the buyer's transfer fees.
It's something we develop in our Bahrain property pack.
The total cost of transferring a BD 150,000 property would be BD 2,550 (1.7%) if completed promptly, plus any legal and agent fees on top.
Do foreigners pay any extra charges compared to locals when purchasing property?
Foreigners and locals pay the same registration fees, stamp duties, and transfer fees when purchasing property in Manama.
The main difference comes in ongoing costs, where foreigners face the 10% annual municipal tax while locals are typically exempt or pay reduced rates. This creates a significant long-term cost difference between foreign and local ownership.
Foreigners may occasionally encounter additional administrative costs such as document translation fees or certification charges for foreign documents, though these are typically minor compared to the main transaction fees.
Some parliamentary decisions may grant fee exemptions specifically to first-time local homebuyers, but these exemptions don't extend to foreign purchasers and aren't consistently available.
The key financial difference is the ongoing BD 600-1,200+ annual municipal tax burden that only applies to foreign property owners.
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Are there annual maintenance or community fees for apartments or villas, and what's the typical range?
Annual maintenance and service charges for residential properties in Manama range from BD 1 to BD 3 per square meter, or alternatively 1% to 3% of the property's total value per year.
Apartments in modern complexes typically charge based on square footage, while villa communities might use percentage-based calculations. Premium developments and older properties requiring more maintenance tend toward the higher end of this range.
These fees cover common area maintenance, security services, landscaping, shared facilities like pools or gyms, and general upkeep of the building or community infrastructure.
For a 100-square-meter apartment, annual service charges would range from BD 100 to BD 300 per year. For a BD 200,000 villa, percentage-based fees would range from BD 2,000 to BD 6,000 annually.
Community fees are paid yearly and vary significantly by development quality, amenities offered, and the age of the property.
How are utility connection fees like water and electricity handled for new properties?
Utility connection fees for water and electricity in Manama are handled directly through the Electricity & Water Authority (EWA) and calculated based on the specific load requirements of your property.
EWA provides individual quotations after reviewing your property's technical specifications and energy requirements. Connection costs vary based on property size, electrical load needed, and water consumption capacity.
These fees are paid as a one-time "capital contribution" directly to EWA before service installation begins. The connection process requires EWA approval and technical assessment before final cost calculation.
Connection fees are regulated by EWA pricing structures, but exact amounts depend on your property's unique requirements. You cannot estimate these costs accurately without getting a specific quotation from EWA for your property.
The connection process and payment must be completed before utility services can be activated in new or newly purchased properties.
Are there any hidden administrative fees charged by the government during the transaction?
Beyond the main registration and stamp duty fees, Manama property transactions involve only minor additional administrative charges.
Standard administrative fees include BD 1 to BD 5 per form or certificate needed during the transaction process. Document handling fees may apply if foreign documents require official translation or certification.
These additional costs are transparent and published in government fee schedules, so they're not truly "hidden" fees. The amounts are relatively small compared to the main transaction costs.
Translation costs for foreign documents can vary but typically remain under BD 100 for standard property transactions. Certification fees for various required documents follow similar modest pricing structures.
There's no evidence of significant undisclosed government fees beyond the clearly published registration, stamp duty, and administrative charges detailed in official documentation.
What penalties or late fees apply if municipal or property taxes are not paid on time?
Late payment penalties for municipal taxes and other property-related charges in Manama are substantial and compound monthly.
You'll face a penalty of 1% of the unpaid tax amount per month, with total penalties capped at 70% of the original overdue amount. This means significant costs can accumulate quickly if payments are delayed.
Late filing of tax returns attracts penalties up to 30% of the tax due, while failure to register property correctly or use proper documentation can result in fines up to BD 100,000 in severe cases.
For example, if you owe BD 600 in annual municipal tax and pay 6 months late, you'd face BD 36 in penalties (6% of BD 600). After 12 months, penalties would reach BD 72.
The penalty structure is designed to encourage prompt payment, with costs escalating rapidly for prolonged non-payment of property-related taxes and fees.
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Do rental properties in Manama have a landlord tax or rental income tax, and at what rate?
Manama does not have a specific landlord tax or rental income tax separate from the standard municipal tax structure.
For foreign property owners, the 10% annual municipal tax based on rental value effectively functions as an indirect tax on rental income potential, regardless of whether you actually rent the property or not.
This municipal tax applies to the theoretical rental value of your property, not your actual rental income received. Even if your property sits empty, you still pay the full 10% municipal tax as a foreign owner.
Local property owners who rent their properties don't face this 10% municipal burden, giving them a significant advantage in rental property investment returns.
There is no additional capital gains tax when selling rental properties, making the municipal tax the primary ongoing tax burden for property investors in Manama.
Is there a capital gains tax when selling property, and how much is it?
There is no capital gains tax on property sales in Manama, representing a significant advantage for property investors.
You can sell your property for any profit amount without paying additional taxes to the Bahrain government on the capital appreciation. This applies to both local and foreign property owners equally.
The absence of capital gains tax makes Manama attractive for property investment strategies focused on capital appreciation rather than rental income generation.
It's something we develop in our Bahrain property pack.
Your only costs when selling will be the standard transfer fees, legal costs, and any real estate agent commissions, but no additional tax on your profits from the property sale.
What are the average notary or legal fees to process a property transaction in Manama?
Notary and legal fees for property transactions in Manama typically range from BD 200 to BD 500 for standard cases, or alternatively 1% to 3% of the property value for more complex transactions.
The fee structure depends on transaction complexity, property value, and specific legal requirements. Simple, straightforward purchases tend toward the lower BD 200-300 range, while complex deals may reach BD 500 or the percentage-based calculation.
These legal fees cover document preparation, legal review, notarization services, and representation during the transaction process. They're separate from and additional to government registration and stamp duty fees.
Real estate agent fees, if you use a broker, typically add another 2% to 5% of the property value. These agent costs are negotiable and separate from legal fees.
For a BD 150,000 property purchase, expect legal fees of BD 300-500 for standard transactions, plus potential agent fees of BD 3,000-7,500 if using a broker.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property costs in Manama include both upfront transaction fees and ongoing annual charges that vary significantly between local and foreign owners.
It's something we develop in our Bahrain property pack.
Sources
- Title Deed Bahrain - Sands of Wealth
- Buy a Property in Bahrain - Bahrain Company Formation
- Bahrain Corporate Other Taxes - PWC Tax Summaries
- Bahrain Government Services - Property Registration
- Property Registration Law - Bahrain Business Laws
- Bahrain Tax Summary - KPMG
- Can a Foreigner Buy a House in Bahrain - Arab MLS
- Bahrain Property Buying Guide - Global Property Guide
- Electricity New Connection - EWA Bahrain
- Buy Property in Bahrain - Pi Startup